It has happened often enough this year to be a pattern. A very well qualified buyer with a significant down-payment, a traditional sale (not short sale or foreclosure), standard contingencies (HOA, Inspections, financing and appraisal) and reasonable time frames.
Guess what, we can't get the contingencies removed! Yes, we get the inspections done, negotiate and finalize the agreement. Check! We provide documents, the waiting period expires and that one is done, too. Check! But the appraisal and financing contingencies--apparently those are just 'guidelines.'
I have read a number of blogs lately saying that communications is the key to this issue. Phooey! I am the master of email, text and voice-mail. Checking in with someone who has no information lets your client know that you are on top of it, but it doesn't produce an outcome. The only outcome my client wants is the contingencies to be removed!
Appraisals are taking a long time to schedule, a long time to generate the report and then they are subject to an underwriting review. The days of the report being turned in and the lender calling you with a thumbs up or down are long gone. No one wants to say an appraisal is okay--or even talk about if it is within reason--until underwriting gets plenty of time to examine it.
Underwriting is also being super-careful on all loans (not a bad thing at all), and this is resulting in many minor conditions that must be cleared before a loan can be approved. I talked to a loan officer today who told me that one of our loans is being held up until a copy of the driver's license is provided and a written explanation about a minor deposit is provided. Let me just tell you, this is not a first time buyer. If they need that minor amount to settle, they have no business buying this house!
So here we sit with a cautious buyer's agent (again, not a bad thing) who wants to wait to remove the financing contingency until we receive full underwriting. Lately, that has been happening days before settlement--way past the 14 day contingency period that has been customary in my area.
In talking to my seller client today, it seems like these financing contingencies need to be reworked. Personally, I am seeing them take more like 25-32 days to be removed. This means that for 2 weeks (if the contract provides 14 days), everyone is on pins and needles wondering if there is a problem with either the buyer's financing or the house appraisal.
The only recourse we have on the seller side is to serve notice and start the clock running for the 3 days to remove the contingency or forfeit the contract. That would not serve anyone needs when you have a strong buyer and a good contract.
Are you seeing the same thing? I have been bumping my buyer's financing and appraisal contingencies up to 28 days and still not making the dates...it is very frustrating for everyone!
If you like what you've read, please consider subscribing to my blog: 
I believe that buying or selling real estate should be a GREAT EXPERIENCE. If I can help you, your friends or family buy or sell their next home in Northern Virginia, please let me know!
If you need help with a home outside of Northern Virginia, I have an extensive network of referral agents and will make sure you are working with the best!
The contents of this blog may not be copied or reproduced without the permission of Holly Weatherwax.
In CA, our contingencies period is 17 days. I learned that that is not enough. So, with my offers for my buyers, I check the box that said there's no loan contingency until loan is funded. With that being checked, I sleep better at night. I think I will bump up my appraisal contingency to 21 days from now on. Sellers might not like it, but we have to do our best to protect our buyer's EMD.
I agree, most buyers are doing the "loan contingency removed on funding" option, but as a listing agent, I recommend the seller reject that offer unless a portion of the deposit is non-refundable. If a buyer is truly qualified, they should have no problem with that. Unless the property is in a dead market with no other potential buyers, it doesn't make sense to take it off the market for 45 days with no assurance of closing.
It is getting very difficult. No one gets fired or in trouble for saying "No" or asking for more documents.
I chuckle when a buyer's agent submits a rural development backed offer and put a 3 week escrow. Good luck with that!
Holly, it's interesting that when I'm representing buyers, I am very reluctant to have them sign contingency removals either for the appraisal (because we've seen so many last minute requests for 2nd opinions) or financing (because the lenders' last minute behavior has gotten so unpredictable. Even if the lender says it's done, it often is not.
Of course, when I'm the listing agent, I think a little differently, although pushing the point might send the buyers running away.
I know, it is just crazy in this current market. We have always been at the mercy of the financing and appraisal, but it has taken on a different flavor lately!
Holly, seller can service notice to perform, but if buyer can't perform because of delays in the loan processing, is it best for sellers to cancel contract? Unless there is another buyer waiting to buy, for my sellers' best interests, I wouldn't force the issue. The onus of choice of the buyer's lender is on the buyer. So important who the buyer chooses for their lender. Can't stress that enough. Thanks for your post. Have a great day.